Georgia Department of Law, from the office of Thurbert E. Baker, Attorney General


Guilty Plea Results From First Law Enforcement Sting Under Georgia's Residential Mortgage Fraud Act

May 21, 2007

Jason Edward Brenner pled guilty today for his part in a mortgage fraud scheme that targeted properties in Gwinnett and Dekalb Counties, according to Georgia Attorney General Thurbert Baker. Brenner pled guilty to one count of Residential Mortgage Fraud in Gwinnett Superior Court. Judge Melody Conner sentenced Brenner to two years in prison followed by eight years of probation, in addition to a fine of $1,000.00. Brenner’s two co-defendants, Charlie Smith and Tara Webb, had previously pled guilty for their roles in the mortgage fraud scheme. Brenner, Smith and Webb were arrested May 27, 2005 as a result of the first law enforcement sting under Georgia’s Residential Mortgage Fraud Act, signed into law on May 5, 2005. The sting was a joint operation between the Office of the Attorney General and the Gwinnett County Police Department.

Baker cited the cooperation of the Gwinnett County Police Department with his office as “essential to the successful sting and prosecution of the fraud ring.” Baker went on that the joint law enforcement effort had “slammed the door shut on a fraud ring that threatened neighborhoods in two of Georgia’s largest counties.”

According to Baker, the fraud involved over-inflating the value of the targeted properties utilizing fraudulent appraisals and obtaining inflated bank loans with fraudulent loan applications. The fraud ring also employed fake mechanic’s liens on the property to suck money out at closing, claiming that money was owed for work done on the house which in reality had never been done. Brenner recruited “straw buyers” for the properties targeted for fraud. These “straw buyers” would qualify for the inflated loans utilizing the fraudulent loan applications. These “straw buyers” would then show up at closing to sign the loan documents so that the bank would release the closing funds, which would include the money to pay off the fictional mechanic’s liens. The fraud ring would then pocket this money, leaving the bank to foreclose on the properties which were worth just a fraction of what the bank had loaned out. The fraud ring targeted properties in Fulton and Dekalb Counties, but a great many of the financial transactions of the ring occurred in Gwinnett County.

As Attorney General, Baker drafted the Residential Mortgage Fraud in 2005 to combat mortgage fraud rings targeting Georgia neighborhoods. The legislation, which went into effect in May 2005, allows the Attorney General or local prosecutors to target mortgage fraud rings for prosecution. Mortgage fraud, if left unchecked, can result in higher interest rates for consumers as banks raise their rates to cover losses from fraud, higher property taxes as county assessors plug in the over-inflated values of mortgage fraud properties into setting comparable values for other homes in an area, and increased crime for a neighborhood after drug rings move into abandoned fraud properties that are often unoccupied after the fraud ring has made its profits at the closing.

Assistant Attorney General David McLaughlin handled the prosecution of the case on behalf of the State, and Detective Amanda Cain of the Gwinnett County Police Department led the State’s investigation..